Gamification—CRM Use Cases, Rewards and Risks

Gamification is the use of game design, techniques and mechanics to enhance non-game contexts. The concept is rapidly being applied to business processes and applications in an effort to achieve business objectives—namely customer engagement and employee productivity. It’s an interesting concept, and one that deserves a deeper look to better understand whether the utility matches the hype.

Gamification works by making processes or applications more engaging, by encouraging people to participate in desired behaviors, by illustrating a path to accomplishment or mastery, and by taking advantage of humans' psychological predisposition to join competitive play. When properly constructed, gamification can bring motivation and competition to otherwise monotonous, repetitive or rote processes, thereby increasing such behaviors as participation, interest, attention (accuracy) and timeliness (productivity).

Gamified apps provide reward mechanisms in the forms of points, scores, badges, leaderboard ranking, expert designation, progress bars or other visual enticements which exemplify accomplishment or permit redemption for tangible or intangible incentives. Don’t be tempted to discount gamification as a distraction in the workplace or a quickly passing fad. This is an innovative business strategy for forward looking business leaders seeking improved engagement with employees and customers. Consider a few of the market projections:

70% of Global 2000 companies will have at least one “gamified” application by 2014. Source: Gartner.

More than 50% of all social business initiatives will include a gamification component by 2013. Source: Constellation Research.

CRM Applications & Use Cases

Injecting game mechanics into software applications and online services is gaining traction to support business objectives such as increased customer acquisitions and staff productivity. Business leaders are trialing CRM and other software programs which leverage game elements that provide a clear sense of progress, instant feedback loop and reward incentives—and which directly accelerate the accomplishment of measurable performance objectives.

Applying game mechanics to sales processes can motivate sales people to make more sales calls, enter more complete activities in the CRM system, or update their opportunities and pipeline more frequently. Applying game mechanics to customer service can stimulate agents or Customer Service Representatives (CSRs) to deliver superior service, close incidents faster, increase team work, raise loyalty measures or achieve higher customer satisfaction scores.

SAP Labs has been piloting gamification apps of all types. In a gamified SAP CRM concept application called Lead-in-One, sales managers distribute new leads to sales staff using a golf metaphor on an iPad. Leads are visualized as golf balls while sales reps are associated with holes on the green. Sales managers can drill down on the golf ball depicted leads for more information and then drag them to the desired sales person hole for a hole in one with accompanying visual and audio effects. SAP has gone further to create a Gamification Platform, built on SAP HANA, that offers a Gamification Administrative Console which permits more flexible team incentives and offers component displays which share point values, steps needed to reach a next level, featured challenges, overall team standings and rich analytics.

Another example that has yet to play out is Salesforce.com's acquisition of Rypple and its subsequent rebranding as Successforce. This is an HCM (Human Capital Management) solution intended to use gamification for employee performance and HR objectives. Rypple has transitioned the traditional process of employee performance reviews from a stale and neglected process to one which is more dynamic with real-time feedback, coaching and recognition of both success and under-performance.

There are even more signs of CRM gamification on the fringes. IActionable has integrated its Engage gamification app with Salesforce.com in order to apply game mechanics to traditional sales and customer service objectives such as improving CRM software adoption, driving more calls, lowering lead response times, improving conversion rates or completing CRM system activity records. The gamified app allows managers to define goals and milestones and then inserts visual progress displays in the Salesforce.com pages. The visual indicators are subtle, but nonetheless act as convincing reminders of where employees should be focusing their time. The company claims its customers have achieved at least an 88% increase in overall Salesforce activity and a 104% increase in targeted activities.

Beyond gamification as an integral part of CRM and enterprise software applications, there are a growing number of pure-play gamification start-ups and emerging growth companies such as Badgeville, BigDoor, Bunchball, Gamify, Gigya, Igloo, Punchtab, RedCritter and UserInfuser (the first open source gamification app). These apps offer new thinking, however, I think as standalone apps, they’re a bit abstract. The bigger value will be derived when they empower existing business objectives from within other enterprise applications such as CRM, ERP or HCM systems.

Gamification—Part of Social, Customer Experience, or Just Gamification?

Games are inherently fun and personally rewarding, so with their social interaction and public display of social status or rewards recognition among friends and connected groups, gamification can be looked at as an evolving component of social media. In fact, the enthusiasm for gamified apps excels when competing and sharing status or rewards among linked social spheres such as your Facebook friends or Twitter followers. Social clearly adds a synergistic component to gamification.

But sliced another way, engaging staff and customers increases the connection and relationship—and the business objectives tied to such relationship—and may thereby fold into Customer Experience Management (CXM) strategies and enabling technologies. CX is all about delivering a rewarding and differentiated service to customers in order to win their affinity and gamification can surely be part of the mix.

The tangential nature of gamification suggests that it’s a solution not best served as a standalone application, and will likely compliment and rationalize with other disruptive technologies as well as more mature applications. Expect gamification to become an underlying enabler of several other technologies.

Gamification Risks, Rewards & Next Steps

HCM studies show that engaged staff are approximately 25 to 30 percent more productive, but on average, less than one-third of your staff are actually engaged. The upside of improved productivity can deliver direct and predictable payback to both top line revenues when applied to sales staff or bottom line income when applied to functions such as customer service. You don’t need to be a CFO to forecast what a 5 or 10 percent increase in productivity could yield the business.

So far we see gamification innovation at the fringes which looks interesting and speculatively promising, but we have yet to see mass customer adoption, abundant customer success studies and software publishers with profitable business models. And as with all disruptive technologies, gamification is not without its critics, some of whom suggest the term is bantered as a buzzword without real innovation, and exploited by defining a seemingly new concept around existing and parochial interests. Other critics suggest that the concept is an oversimplification of more sophisticated staff productivity methods.

Caution is warranted but the upside of a technology-enabled process that can bring visibility to staff productivity, reward performers and aid those who are under-performing —or collectively increase productivity across the board is a significant and sustainable win for any organization. The onus is now on the providers to clearly demonstrate these benefits, and then they’ll win over the support of skeptics and the adoption of markets.

A recent survey shared in Digital Marketing News magazine reported that three topics which are "completely over-hyped" are gamification (24%), Big Data (17%) and social CRM/social marketing (37%). To me, this shows that vendors are misusing these terms for their own self interests (and causing customers to become overly skeptical), and marketers are failing to recognize legitimate technologies which are yet far from "packaged" and mature.

Spencer Spitz

While its being applied in new ways, gamification is in no way new. Companies have been gamifying sales compensation plans for years.

Chris Nichols

I first became aware of gamification when checking out Badgeville and was immediately a skeptic. However, after reviewing the gamification maker and its customer results I have since changed my tune. Badgeville customers report from 20% to 250% increases in user engagement. I watched Samsung use Badgeville to create its Samsung Nation and in one quarter drive a 34% increase in users, a 220% increase in shopping cart value and a 700% increase in facebook Likes. I also think this company is smart in that its evolving from gamified apps to a gamification platform in order to tap into a growing developer community and become a part of many other business applications. I’m sure other gamification software makers are doing or will be doing something similar, but for now this company is taking off like a rocket ship.

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HCM studies show that engaged staff are approximately 25 to 30 percent more productive, but on average, less than one-third of your staff are actually engaged. You don’t need to be a CFO to forecast what a 5 or 10 percent increase in staff productivity could yield the business.